April 25 (UPI) -- The U.S. Supreme Court declined to hear a General Motors appeal, potentially exposing the company to new liabilities in its ignition switch lawsuits.
At least 124 people were killed and at least 275 were injured in small cars made by the old GM in which faulty ignition switches were found to be responsible for accidents. In 2014, the company recalled over 2.7 million cars with ignition switches that could cause cars to stall while being driven.
Dealing with the issue occupied most of the first year of Mary Barra's tenure as GM CEO.
The court left intact, without comment, a 2nd Circuit Court of Appeals ruling that said GM's 2009 bankruptcy was not a shield from lawsuits regarding accidents that occurred prior to the bankruptcy and reorganization of the company. GM contended that it emerged as a new company, not involved in any legal claims predating the bankruptcy. It noted a federal bankruptcy law provision that allows a purchaser to acquire a debtor's assets "free and clear." The appeals court ruled the provision does not apply to GM's situation because the company was aware of the defect prior to the bankruptcy and did not notify each potentially affected customer.
The court's decision Monday indicates that GM will have to end claims against it with settlements and payouts, or face individual cases in court. Plaintiffs' lawyers have estimated that claims against the company could total $10 billion, Bloomberg News reported Tuesday. It added that payouts could interfere with stock dividend payments or GM's aim to buy back its stock.